MANAGERS MONTHLY COMMENTARY

INVESTMENT MANAGERS:
Patrick Toes
Investment Director with over 20 years experience in fund management. Previously a member of Rensburg Sheppards Asset Allocation and Fund Selection Committees for over 9 years.

OCTOBER 2012
We are particularly circumspect about growth in Europe being better than the States over the next couple of years so we are disinclined to believe EZ valuations based on this premise. We expect that EZ corporates will be mired in weaker growth for a substantial time and our preference is towards the UK on valuation and lower macro risk. OBAMAS SECOND TERM Despite Abraham Lincolns famous comment A house divided against itself cannot stand, we expect more conflict with Republicans in Congress thus weak government and reliance on QE as a policy tool. The fiscal cliff should be avoided but we arent categorical in that view. We dont feel a grand solution for US deficits is likely and those deficits will remain high fertile ground for gold. However, the post election environment may encourage the corporate sector to put their cash hoard (circa $1,700 billion) to work through M&A or through capital spend (IT). This may be the salvation for CEOs to combat the dilemma of elevated margins which cannot go on forever. Currently corporate profits are at a record high as a percentage of GDP while wages are at a record low. Our contention is that companies capable of growing revenue and/or maintaining profit margins will become very sought-after assets and likely to be valued well in excess of market valuations. We consider our portfolio is correctly weighted in this area. POST PRANDIAL Dr. Pippa Malmgren, a financial market advisor to the White House and member of the National Economic Council 2001-2, recently observed that one of the most interesting trends in the world currently is that manufacturing is rapidly leaving China and moving back to the middle of the US. This is known as onshoring. A recent report from PWC showed that it is now less expensive to produce steel in the US than in China and that an array of industries have relocated and will relocate manufacturing back to the US .The wage differential between the US and China is narrowing so fast and quality control in the US is so good. You can build excellent facilities cheaply as American construction companies have been waiting for something to do and so will do it practically for free. An acceleration of onshoring could be a big boon for the US economy. We confidently expect that our clients will benefit.

"Despicable trickery at elections; under-handed tampering with public officers, and cowardly attacks upon opponents, with scurrilous newspapers for shields, and hired pens for daggers"
Charles Dickens (American Notes) commenting on Washington DC in 1842.

David Cowell
Chief Executive, possessing over 40 years experience in financial services, with over 25 years being investment management focussed.

The US presidential election campaign is over and whilst Obama may have thought Dickens comments were behind him, unfortunately he may well have another four years to come; more of that later. This months commentary is focussed on the US investment outlook and to a lesser degree Europe & UK. We plan to look at Asia and Emerging Markets in our next edition. We will start with a briefing on their 3rd quarter reporting season, which at an aggregate level saw S&P 500 earnings fall 1.2% yoy. S&P 500 earnings growth for the 3rd quarter as recent as July & April expected a rise of 3.1% and 5.3% respectively. As you may recall we have been saying that US corporate earnings were too high and would have to fall. We continue to believe that and that earnings for both Q4 and 2013 look too high. The US media likes to concentrate on earnings beats as an indication of improvement. However, we see these figures for what they are: management guiding analysts forecasts low so they can beat them. Far more interesting is the percentage of companies beating expectations compared to the previous quarter. That is falling. Moreover, in the current reporting season, only 36% of companies beat revenue expectations; much worse than the long-run average of 62%. In addition, an unusually high percentage of companies (48 of the 64) that have issued EPS guidance for Q4 2012, have guided lower. VALUATION AND GROWTH Below are two charts which look at MSCI indices for various regions as at the end of October, highlighting valuation (PE ratio) and earnings growth. The US looks more expensive than UK & European markets, bearing in mind our earlier comments about growth expectation. However, whilst we are cautious about growth and margins in the States, we have to acknowledge that the economic backdrop is far better there than Europe or the UK.

SALES: Julie Jones

Julie has over 20 years experience of working in investment sales and marketing, previously as Head of UK Retail Sales for BNY Mellon (Newton Investment Management).

For further information call :

0113 274 7700

Email : sales@mcim.co.uk Or visit us at : www.myddletoncroft.co.uk

IMPORTANT INFORMATION This information has been approved for distribution to professional investors only. The information in this document is believed to be correct but cannot be guaranteed. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. This material is not intended as an offer or solicitation for the purchase or sale of any security or any other action, without first seeking advice as to the suitability of it for your needs.

Myddleton Croft Investment Managers, 1 Woodside Mews, Clayton Wood Close, Leeds, LS16 6QE T: 0113 274 7700 F: 0113 274 7711 E-mail: info@mcim.co.uk Website: www.myddletoncroft.co.uk Myddleton Croft Ltd is authorised and regulated by the Financial Services Authority. Registered in England & Wales number 05782909. VAT number UK 889 241088. Registered office: 11 Clifford Avenue, Ilkley, LS29 0AS.

MCIM Balanced Defensive Portfolio

INVESTMENT MANAGERS
Patrick Toes
Investment Director with over 20 years experience in fund management. Previously a member of Rensburg Sheppards Asset Allocation and Fund Selection Committees for over 9 years.

OCTOBER 2012

PERFORMANCE SINCE LAUNCH

David Cowell
Chief Executive, possessing over 40 years experience in financial services, with over 25 years being investment management focussed.

SALES: Julie Jones

Julie has over 20 years experience of working in investment sales and marketing, previously as Head of UK Retail Sales for BNY Mellon (Newton Investment Management).

2012 PERFORMANCE

Model portfolios include cost of underlying investments and Myddleton Crofts annual management fees, but not the charges for custodian, dealing and settlement (equivalent to platform charges)

For further information call :

0113 274 7700

Email : info@mcim.co.uk Or visit us at : www.myddletoncroft.co.uk
IMPORTANT INFORMATION This information has been approved for distribution to retail and professional investors only. The information in this document is believed to be correct but cannot be guaranteed. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Before contemplating any transaction, you should consult your financial adviser. This material is not intended as an offer or solicitation for the purchase or sale of any security or any other action, without first seeking advice as to the suitability of it for your needs. *Clients portfolios may differ from model portfolios dependent on their specific objectives.

ASSET ALLOCATION

9% 19%

UK Equities International Equities

16% Alternatives Commodities 7% 25% 5% Global Fixed Interest 19% Cash UK Fixed Interest

Myddleton Croft Investment Managers, 1 Woodside Mews, Clayton Wood Close, Leeds, LS16 6QE T: 0113 274 7700 F: 0113 274 7711 E-mail: info@mcim.co.uk Website: www.myddletoncroft.co.uk Myddleton Croft Ltd is authorised and regulated by the Financial Services Authority. Registered in England & Wales number 05782909. VAT number UK 889 241088. Registered office: 11 Clifford Avenue, Ilkley, LS29 0AS.

MCIM Balanced Cautious Portfolio

INVESTMENT MANAGERS
Patrick Toes
Investment Director with over 20 years experience in fund management. Previously a member of Rensburg Sheppards Asset Allocation and Fund Selection Committees for over 9 years.

OCTOBER 2012

PERFORMANCE SINCE LAUNCH

David Cowell
Chief Executive, possessing over 40 years experience in financial services, with over 25 years being investment management focussed.

SALES: Julie Jones

Julie has over 20 years experience of working in investment sales and marketing, previously as Head of UK Retail Sales for BNY Mellon (Newton Investment Management).

2012 PERFORMANCE

Model portfolios include cost of underlying investments and Myddleton Crofts annual management fees, but not the charges for custodian, dealing and settlement (equivalent to platform charges)

For further information call :

0113 274 7700

Email : info@mcim.co.uk Or visit us at : www.myddletoncroft.co.uk
IMPORTANT INFORMATION This information has been approved for distribution to retail and professional investors only. The information in this document is believed to be correct but cannot be guaranteed. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Before contemplating any transaction, you should consult your financial adviser. This material is not intended as an offer or solicitation for the purchase or sale of any security or any other action, without first seeking advice as to the suitability of it for your needs. *Clients portfolios may differ from model portfolios dependent on their specific objectives.

ASSET ALLOCATION

7% 21% 16%

UK Equities International Equities Alternatives

6% 4% 28%

Commodities UK Fixed Interest Global Fixed Interest 18% Cash

Myddleton Croft Investment Managers, 1 Woodside Mews, Clayton Wood Close, Leeds, LS16 6QE T: 0113 274 7700 F: 0113 274 7711 E-mail: info@mcim.co.uk Website: www.myddletoncroft.co.uk Myddleton Croft Ltd is authorised and regulated by the Financial Services Authority. Registered in England & Wales number 05782909. VAT number UK 889 241088. Registered office: 11 Clifford Avenue, Ilkley, LS29 0AS.

MCIM Balanced Moderate Portfolio

INVESTMENT MANAGERS
Patrick Toes
Investment Director with over 20 years experience in fund management. Previously a member of Rensburg Sheppards Asset Allocation and Fund Selection Committees for over 9 years.

OCTOBER 2012

PERFORMANCE SINCE LAUNCH

David Cowell
Chief Executive, possessing over 40 years experience in financial services, with over 25 years being investment management focussed.

SALES: Julie Jones

Julie has over 20 years experience of working in investment sales and marketing, previously as Head of UK Retail Sales for BNY Mellon (Newton Investment Management).

2012 PERFORMANCE

Model portfolios include cost of underlying investments and Myddleton Crofts annual management fees, but not the charges for custodian, dealing and settlement (equivalent to platform charges)

For further information call :

0113 274 7700

Email : info@mcim.co.uk Or visit us at : www.myddletoncroft.co.uk
IMPORTANT INFORMATION This information has been approved for distribution to retail and professional investors only. The information in this document is believed to be correct but cannot be guaranteed. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Before contemplating any transaction, you should consult your financial adviser. This material is not intended as an offer or solicitation for the purchase or sale of any security or any other action, without first seeking advice as to the suitability of it for your needs. *Clients portfolios may differ from model portfolios dependent on their specific objectives.

ASSET ALLOCATION

UK Equities 5% 15% 5% 4% 17% 32% Global Fixed Interest Cash 23% Alternatives Commodities UK Fixed Interest International Equities

Myddleton Croft Investment Managers, 1 Woodside Mews, Clayton Wood Close, Leeds, LS16 6QE T: 0113 274 7700 F: 0113 274 7711 E-mail: info@mcim.co.uk Website: www.myddletoncroft.co.uk Myddleton Croft Ltd is authorised and regulated by the Financial Services Authority. Registered in England & Wales number 05782909. VAT number UK 889 241088. Registered office: 11 Clifford Avenue, Ilkley, LS29 0AS.

***IMPORTANT NOTE : THE ADVENTUROUS PORTFOLIO HAS BEEN RENAMED THE PROGRESSIVE PORTFOLIO*** MCIM Balanced Progressive Portfolio
INVESTMENT MANAGERS
Patrick Toes
Investment Director with over 20 years experience in fund management. Previously a member of Rensburg Sheppards Asset Allocation and Fund Selection Committees for over 9 years.

OCTOBER 2012

PERFORMANCE SINCE LAUNCH

David Cowell
Chief Executive, possessing over 40 years experience in financial services, with over 25 years being investment management focussed.

SALES: Julie Jones

Julie has over 20 years experience of working in investment sales and marketing, previously as Head of UK Retail Sales for BNY Mellon (Newton Investment Management).

2012 PERFORMANCE

Model portfolios include cost of underlying investments and Myddleton Crofts annual management fees, but not the charges for custodian, dealing and settlement (equivalent to platform charges)

For further information call :

0113 274 7700

Email : info@mcim.co.uk Or visit us at : www.myddletoncroft.co.uk
IMPORTANT INFORMATION This information has been approved for distribution to retail and professional investors only. The information in this document is believed to be correct but cannot be guaranteed. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Before contemplating any transaction, you should consult your financial adviser. This material is not intended as an offer or solicitation for the purchase or sale of any security or any other action, without first seeking advice as to the suitability of it for your needs. *Clients portfolios may differ from model portfolios dependent on their specific objectives.

ASSET ALLOCATION

4% 14% 25%

UK Equities International Equities Alternatives Commodities UK Fixed Interest Global Fixed Interest 34% Cash

4% 4%

15%

Myddleton Croft Investment Managers, 1 Woodside Mews, Clayton Wood Close, Leeds, LS16 6QE T: 0113 274 7700 F: 0113 274 7711 E-mail: info@mcim.co.uk Website: www.myddletoncroft.co.uk Myddleton Croft Ltd is authorised and regulated by the Financial Services Authority. Registered in England & Wales number 05782909. VAT number UK 889 241088. Registered office: 11 Clifford Avenue, Ilkley, LS29 0AS.

***IMPORTANT NOTE: THE HIGHLY ADVENTUROUS PORTFOLIO HAS BEEN RENAMED THE ADVENTUROUS PORTFOLIO***

MCIM Balanced Adventurous Portfolio

INVESTMENT MANAGERS
Patrick Toes
Investment Director with over 20 years experience in fund management. Previously a member of Rensburg Sheppards Asset Allocation and Fund Selection Committees for over 9 years.

OCTOBER 2012

PERFORMANCE SINCE LAUNCH

David Cowell
Chief Executive, possessing over 40 years experience in financial services, with over 25 years being investment management focussed.

SALES: Julie Jones

Julie has over 20 years experience of working in investment sales and marketing, previously as Head of UK Retail Sales for BNY Mellon (Newton Investment Management).

2012 PERFORMANCE

Model portfolios include cost of underlying investments and Myddleton Crofts annual management fees, but not the charges for custodian, dealing and settlement (equivalent to platform charges)

For further information call :

0113 274 7700

Email : info@mcim.co.uk Or visit us at : www.myddletoncroft.co.uk
IMPORTANT INFORMATION This information has been approved for distribution to retail and professional investors only. The information in this document is believed to be correct but cannot be guaranteed. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Before contemplating any transaction, you should consult your financial adviser. This material is not intended as an offer or solicitation for the purchase or sale of any security or any other action, without first seeking advice as to the suitability of it for your needs. *Clients portfolios may differ from model portfolios dependent on their specific objectives.

ASSET ALLOCATION

2% 13% 28% 4% 3%

UK Equities International Equities Alternatives Commodities

14% UK Fixed Interest Global Fixed Interest 36% Cash

Myddleton Croft Investment Managers, 1 Woodside Mews, Clayton Wood Close, Leeds, LS16 6QE T: 0113 274 7700 F: 0113 274 7711 E-mail: info@mcim.co.uk Website: www.myddletoncroft.co.uk Myddleton Croft Ltd is authorised and regulated by the Financial Services Authority. Registered in England & Wales number 05782909. VAT number UK 889 241088. Registered office: 11 Clifford Avenue, Ilkley, LS29 0AS.

MCIM Balanced Speculative Portfolio

INVESTMENT MANAGERS
Patrick Toes
Investment Director with over 20 years experience in fund management. Previously a member of Rensburg Sheppards Asset Allocation and Fund Selection Committees for over 9 years.

OCTOBER 2012

PERFORMANCE SINCE LAUNCH

David Cowell
Chief Executive, possessing over 40 years experience in financial services, with over 25 years being investment management focussed.

SALES: Julie Jones

Julie has over 20 years experience of working in investment sales and marketing, previously as Head of UK Retail Sales for BNY Mellon (Newton Investment Management).

2012 PERFORMANCE

Model portfolios include cost of underlying investments and Myddleton Crofts annual management fees, but not the charges for custodian, dealing and settlement (equivalent to platform charges)

For further information call :

0113 274 7700

Email : info@mcim.co.uk Or visit us at : www.myddletoncroft.co.uk
IMPORTANT INFORMATION This information has been approved for distribution to retail and professional investors only. The information in this document is believed to be correct but cannot be guaranteed. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Before contemplating any transaction, you should consult your financial adviser. This material is not intended as an offer or solicitation for the purchase or sale of any security or any other action, without first seeking advice as to the suitability of it for your needs. *Clients portfolios may differ from model portfolios dependent on their specific objectives.

ASSET ALLOCATION

1% 4% 4% 2% 7% 35%

UK Equities International Equities Alternatives Commodities UK Fixed Interest

47%

Global Fixed Interest Cash

Myddleton Croft Investment Managers, 1 Woodside Mews, Clayton Wood Close, Leeds, LS16 6QE T: 0113 274 7700 F: 0113 274 7711 E-mail: info@mcim.co.uk Website: www.myddletoncroft.co.uk Myddleton Croft Ltd is authorised and regulated by the Financial Services Authority. Registered in England & Wales number 05782909. VAT number UK 889 241088. Registered office: 11 Clifford Avenue, Ilkley, LS29 0AS.

MCIM Enhanced Income Portfolio

INVESTMENT MANAGERS INVESTMENT MANAGERS
Patrick Toes Patrick Toes
Investment Director with over 20 years 20 years Investment Director with over experience in fund management. experience in fund management. Previously aa member of Rensburg Previously member of Rensburg Sheppards Asset Allocation and Fund Sheppards Asset Allocation and Fund Selection Committees for over 9 9 years and former Selection Committees for over years.
chairman of those committees at BWD Rensburg, he holds a MSC in Investment Analysis and is an

OCTOBER 2012

PERFORMANCE SINCE JAN 2008*

David Cowell Associate Member of the Society of Investment

Chief Executive, possessing over 40 years experience in financial services, with over SALES: 25 years being investment management focussed. David formulates the macro economic position and leads the investment process Julie Jones across the portfolio range. He also has over 10 years Julie business 20 years to small and experience of has over consultancy experience of medium working in investment sales and sized enterprises.

experience in financial services, with over 25 years being investment management David Cowell focussed.

Chief Executive, possessing over 40 years Professionals (ASIP).

marketing, previously as Head of UK Retail Sales for BNY Mellon (Newton Investment Management).
Model portfolios include cost of underlying investments and Myddleton Crofts annual management fees, but not the charges for custodian, Model portfolios include cost of underlying dealing and settlement (equivalent to platform investments and Myddleton Crofts annual charges)

12 MONTH PERFORMANCE

management fees, but not the charges for custodian, dealing and settlement (equivalent to platform charges)

For further information call For further information call : :

0113 274 7700 0113 274 7700

Email : info@mcim.co.uk Email : info@mcim.co.uk Or visit us : Or visit us atat : www.myddletoncroft.co.uk www.myddletoncroft.co.uk

IMPORTANT INFORMATION This information has been approved for distribution to IMPORTANT INFORMATION retail and professional investors only. The information This information has been approved for distribution in this document is believed to be correct but cannot to retail and professional investors only. The be guaranteed. Past performance is not a guide to information in this document is be repeated. The future performance and may notbelieved to be correct but cannot be guaranteed. Past performance not . value of investments and the income from themismay a goguide as well as upperformance and not get back down to future and investors may may not be repeated. originally invested. Before contemplating the amounts The value of investments and the income from them may go should well as your financial any transaction, you down as consult up and investors may This material is amounts originally invested. adviser. not get back thenot intended as an offer or Before contemplating any sale of any you should solicitation for the purchase or transaction, security or consult your without adviser. This material the any other action,financial first seeking advice as tois not intended it an offer or solicitation for the purchase or suitability of as for your needs. sale of any security or any other action, without *Clients portfolios may differ from model portfolios first seeking on their to the objectives. dependentadvice asspecificsuitability of it for your needs. *Clients portfolios may differ from model portfolios dependent on their specific objectives.

The Enhanced Income Portfolio was launched at the beginning of 2011. It should be noted that the performance before that date (presented above) is from the back-tested portfolio and is provided for illustration purposes only.

ASSET ALLOCATION

5% 5% 5% 13%

UK Equities International Equities Alternatives 5% Commodities UK Fixed Interest

46%

21%

Global Fixed Interest Cash

Myddleton Croft Investment Managers, 1 Woodside Mews, Clayton Wood Close, Leeds, LS16 6QE T: 0113 274 7700 F: 0113 274 7711 E-mail: info@mcim.co.uk Website: www.myddletoncroft.co.uk Myddleton Croft Ltd is authorised and regulated by the Financial Services Authority. Registered in England & Wales number 05782909. VAT number UK 889 241088. Registered office: 11 Clifford Avenue, Ilkley, LS29 0AS.

MCIM Tactical Growth Portfolio

INVESTMENT MANAGERS
Patrick Toes
Investment Director with over 20 years experience in fund management. Previously a member of Rensburg Sheppards Asset Allocation and Fund Selection Committees for over 9 years.

OCTOBER 2012

PERFORMANCE SINCE JAN 2011*

David Cowell
Chief Executive, possessing over 40 years experience in financial services, with over 25 years being investment management focussed.

SALES: Julie Jones

Julie has over 20 years experience of working in investment sales and marketing, previously as Head of UK Retail Sales for BNY Mellon (Newton Investment Management).

2012 PERFORMANCE*

Model portfolios include cost of underlying investments and Myddleton Crofts annual management fees, but not the charges for custodian, dealing and settlement (equivalent to platform charges)

For further information call :

0113 274 7700

Email : info@mcim.co.uk Or visit us at : www.myddletoncroft.co.uk
IMPORTANT INFORMATION This information has been approved for distribution to retail and professional investors only. The information in this document is believed to be correct but cannot be guaranteed. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Before contemplating any transaction, you should consult your financial adviser. This material is not intended as an offer or solicitation for the purchase or sale of any security or any other action, without first seeking advice as to the suitability of it for your needs. *Clients portfolios may differ from model portfolios dependent on their specific objectives.

*This has been run as a model portfolio since January 2011

ASSET ALLOCATION

UK Equities 10% 10% 20% 35% 11% 14% Commodities Global Fixed Interest Cash International Equities Alternatives

Myddleton Croft Investment Managers, 1 Woodside Mews, Clayton Wood Close, Leeds, LS16 6QE T: 0113 274 7700 F: 0113 274 7711 E-mail: info@mcim.co.uk Website: www.myddletoncroft.co.uk Myddleton Croft Ltd is authorised and regulated by the Financial Services Authority. Registered in England & Wales number 05782909. VAT number UK 889 241088. Registered office: 11 Clifford Avenue, Ilkley, LS29 0AS.